Insurers are increasing investments in systems to improve data crunching by at least 20% over last year. Most of this is toward subscription of data, build stronger data architecture and for updated technology towards better systems to crunch data.
The driving force is the challenges that are emerging due to substandard and unstructured data. “For a digital platform like ours, data is the anchor for all businesses conducted on the platform. There has been over 50% increase in investments in data storing, conversion and resultant analytics compared to 2018,” said Vaidyanathan Ramani, head of product and innovation at Policybazaar.com.
Ramani said, “While lack of information on customers in an easy accessible form poses a problem, most industry officials continue to rely on declaration of data. Lack of standard fraud registry to red-flag dubious sources of risk and customers is another growing problem.”
Though the insurance industry claims to see no shortage of data, complaints on lack of data structure, management and standardisation pose imminent challenge. A few insurers claim to see a growing trend in studying data to run digital marketing campaign and media optimisation for better understanding of customer needs.
In the life insurance business, (big) data is usually used in customer acquisition, where one uses external data sources to run digital marketing campaign, media optimisation, and better understand the needs and desires of customers.
“Since, lot of content consumption and customers’ reactions are expressed online, advertising networks are able to classify and generate sharp customer segments, which are very useful for digital marketing. We have seen an increase of 15% in investment for resources and data-based digital marketing compared to last year,” Anshuman Verma, chief marketing and digital officer of Pramerica Life Insurance, said.
Re-insurers too are inclined to use data to draw comparative analysis and patterns to design effective pricing. “Insurers analyse global earthquake data, weather patterns like propensity for disasters, pollution, rain, wind speed to introduce new features in existing products as change in needs occur in time of calamity,” Verma added.
Edelweiss General Insurance CEO Shanai Ghosh said the company is consciously prioritising investment in enabling technologies, which is seeing an increase of around 20% year-on-year.
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